A Lake Forest developer and manufacturer of drug testing products scrapped plans for its initial public offering of 2.5 million common shares of stock, dashing hopes of raising up to $25 million.
"We are withdrawing the IPO because of market conditions," Ansys Diagnostics Inc. chief financial officer Suzanne David said Thursday. She declined to elaborate.
Ansys notified the Securities and Exchange Commission in a letter July 2 that it was calling off plans for the stock offering.
In February, the company announced plans to sell 2.5 million shares at $10 to $12 each, according to a regulatory report filed with the SEC. The company later lowered the price range to $8 to $10.
Gail Bronson, a senior analyst with IPO Monitor, a Los Angeles-based stock research company, said summer is traditionally a poor time for IPOs.
"It's not the best time to come out when most stockbrokers are at the seashore or when we're in such an erratic stock market environment," she said. "So perhaps [Ansys] decided it might make sense to wait."
The number of IPOs in the first half of the year declined 18% from the first six months last year, IPO Monitor co-founder Tom Madden said. A total of 211 companies went public in the first half this year, compared with 258 in the first six months in 1998, he said.
Organized in 1988 to acquire the analytical-systems division of Marion Laboratories Inc., Ansys has shown a profit for each of the last five years. Sales surged more than 75% last year to $18.9 million from $10.7 million the year before. Net income more than doubled to $2.69 million from $1.21 million.
Ansys products are used in random employee testing, pre-employment screening, government-mandated testing, hospital-based testing, and parole and probation monitoring.
Ansys developed some of its products in cooperation with Roche Diagnostic Systems Inc., which holds ownership rights to several of these products, including TesTstik and TesTcup. Roche pays Ansys to manufacture them under an exclusive agreement that expires in 2002 and 2003.